Why does probate cost so much? It’s a question many families ask when they discover just how much can be deducted from an estate before an inheritance is finally distributed.
The answer is that probate itself isn’t necessarily the expensive part.
In England and Wales, the current probate application fee is £526 for estates worth more than £5,000. There is no application fee where the estate is £5,000 or less.
So where can the thousands of pounds in costs come from?
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Request Your Free Estate Planning ReviewProbate is only one part of administering an estate
When someone passes away, their executors may have to deal with far more than simply applying for probate.
Depending on the estate, this can include:
Identifying and valuing property
Finding bank accounts and investments
Dealing with HMRC and Inheritance Tax
Completing estate and tax forms
Obtaining the Grant of Probate
Paying outstanding debts
Selling or transferring property
Dealing with beneficiaries
Preparing estate accounts
Distributing the remaining assets
A family can choose to deal with much of this themselves. GOV.UK confirms that you can apply for probate yourself, which can be cheaper than paying a probate practitioner.
Alternatively, the executors may instruct a solicitor or professional to deal with some or all of the administration.
How do solicitors charge for probate?
There isn’t one standard percentage that every solicitor charges.
Professional fees can be based on:
A fixed fee
An hourly rate
A percentage of the estate
Or a combination of these
HMRC’s guidance says that solicitors in England, Wales and Northern Ireland normally base their charges for administering an estate on the amount of work involved, and notes that the Law Society’s general guidance indicates charges of around 1–2% of the probate value, depending on the size of the estate.
This is why the cost can become significant on a larger estate.
For example, 1% of a £750,000 estate is £7,500.
At 2%, that would be £15,000.
And that’s before considering any other costs that may arise from a particularly complicated estate.
Who gets the money?
This is an important distinction.
The £526 probate application fee is paid to HM Courts and Tribunals Service.
Professional administration fees, however, are paid to the solicitor or other professional for the work they carry out.
So when someone says:
“Probate cost us £15,000.”
They may actually be talking about the overall cost of professionally administering the estate, rather than the probate application fee itself.
Can good estate planning reduce the problem?
Potentially.
The easier an estate is to understand and administer, the less complicated the process may be.
Good estate planning can also look at who inherits what, how assets are held and whether appropriate trusts or other arrangements could be used.
And there is another reason to think about estate planning before it is needed.
Depending on your circumstances, appropriate planning may potentially help:
Reduce future Inheritance Tax
Make the administration of your estate simpler
Preserve more of your estate for your chosen beneficiaries
And, in some circumstances, planning designed to protect an estate from IHT may also provide protection for a home or other assets in relation to future care costs.
However, care-fee protection isn’t automatic. The circumstances, timing and purpose of any planning are important.
What about the original Will?
This is another area many people don’t think about.
People often leave their original Will with the solicitor who prepared it. When the time comes to administer the estate, the family may naturally return to that same firm.
That doesn’t necessarily mean the family has to use that solicitor for the administration.
But it is worth knowing where your original Will is kept, who your executors are and what options your family will have when the time comes.
The real question isn’t “How much does probate cost?”
It’s:“How much will it cost my family to administer my estate — and how much will ultimately reach my beneficiaries?”
Inheritance Tax, professional administration costs and the way your estate is structured can all affect the final outcome.
That’s why estate planning isn’t simply about writing a Will.
It’s about considering what happens to everything you’ve spent your lifetime building.
